Pundits divided on outlook for economy

By ANDREW MacDONALD

Most of the financials are in for the June quarter and what a bumper reporting season it's been so far.

There've been profits, lots of profits, and brokers waxing about the performance of stocks linked to the construction sector.

Why? Because they - they being stocks like Fletcher Building, Steel & Tube and Nuplex - have been gems in a buoyant sharemarket.

Now, some pundits say the economy will slow. Its key driver, the property market, has cooled and the slap-up run of listed firms will wane.

Others disagree. Take Macquarie Equities' investment director, Arthur Lim, who has the sharemarket growing by 12 to 15 per cent in the year ahead.

With migration down, the dollar, oil prices and interest rates up and property easing, economic headwinds are on the horizon.

But plenty of companies rooted in the domestic economy, such as Fletcher Building and Freightways, remain optimistic.

"From Freightways' viewpoint, the domestic economy remains favourable and we are unaware of any material changes to our operating environment that may negatively impact on our performance," managing director Dean Bracewell said.

MasterCard's economic adviser for the Asia-Pacific region, Yuwa Hedrick-Wong, though, doubts the NSX can maintain its double-digit growth in the year ahead.

"The main reason is due to the uncertainty related to the interest rate outlook," Dr Hedrick-Wong said.

Growth would slow to a high single-digit rate.

- NZPA